Can we make up the difference between Sale price and Appraisal with FHA?

[beatboy77]

We recently found a cabin we wanted to purchase and contacted the home owner. He agreed to sell to us for $195k, however the appraisal came back at $175k, a $20k difference.

This is the best price the seller will let it go for due to multiple offers he has received on the property, so negotiating is not an option. We are not going to risk losing the place over only $20k.

We really love this place and are more than willing to pay the $20k difference out of our savings. Is this allowed with FHA?

[tooleman694]

Yup you can do it, but its gonna be your 3.5 percent + the 20k.

[TurboFX]

Yes, but keep in mind that you are buying a 175K property for 195K?  If you really love it and it makes sense for you to pay more for it than what it's worth then go for it!  If you are going to be putting an extra 20K did you look into purchasing a more expensive property vs over paying for one? Maybe up to 250K range? That might be an option to consider. Raise your price and you might find another property that you love more and not overpay.  Make financial decisions that makes financial sense and not based mainly on emotions.